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Income in India

Income in India discusses the financial state in India. With rising economic growth and India's income is also rising rapidly. As an overview, India's per capita net national income or NNI was around Rs. 98,374 in 2022-23.[1] The per-capita income is a crude indicator of the prosperity of a country. In contrast, the gross national income at constant prices stood at over 128 trillion rupees.[2] According to a 2021 report by the Pew Research Center, India has roughly 1.2 billion lower-income individuals, 66 million middle-income individuals, 16 million upper-middle-income individuals, and barely 2 million in the high-income group.[3] According to The Economist, 78 million of India's population are considered middle class as of 2017, if defined using the cutoff of those making more than $10 per day, a standard used by the India's National Council of Applied Economic Research.[4] According to the World Bank, 93% of India's population lived on less than $10 per day, and 99% lived on less than $20 per day in 2021.[5]

Financial year data

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GDP per capita, GNI per capita and NNI per capita of India[6][7]
Year At current prices (INR) At 2011-12 prices (INR)
GDP per capita GNI per capita NNI per capita GDP per capita GNI per capita NNI per capita
2023-24 211,725 208,633 184,205 124,600 122,766 106,744
2022-23 194,879 192,201 169,496 116,216 114,478 99,404
2021-22 172,422 170,392 150,906 109,762 108,345 94,054
2020-21 146,301 144,334 127,065 100,981 99,578 86,054
2019-20 149,701 148,261 132,115 108,247 107,191 94,270
2018-19 142,328 140,804 125,883 105,526 104,377 92,241
2017-18 130,061 128,655 115,224 100,035 98,925 87,586
2016-17 118,489 116,070 103,870 94,752 93,639 83,003
2015-16 107,342 106,096 94,797 88,617 87,565 77,659
2014-15 98,405 97,241 86,647 83,091 82,107 72,805
2013-14 89,796 88,678 79,118 78,348 77,370 68,572
2012-13 80,519 79,573 70,983 74,600 73,722 65,538
2011-12 71,610 70,980 63,462 71,610 70,980 63,462

Estimates

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The International Labour Organization in its report India Employment Report 2024: Youth Employment, Education and Skills states that the average earning of regular salaried workers (Rs 19,010) was considerably higher than those of self-employed (Rs 11,973) and casual (Rs 8,267) workers in 2022.[8]

Average monthly earnings in 2022
(rupees, nominal value)[9]
Employment Rural Urban Total
Self-employed 10,201 17,991 11,973
Regular salaried 15,177 21,826 19,010
Casual 7,997 9,749 8,267
Number and share of employment
(aged 15+) in 2022[9]
Employment Number (million) Share
Self-employed 304.1 55.8%
Regular salaried 118.1 21.5%
Casual 122.2 22.7%

India's nominal per capita income was US$1,670 per year in 2016, ranked 112th out of 164 countries by the World Bank,[10] while its per capita income on purchasing power parity (PPP) basis was US$5,350, and ranked 106th.[11] Other estimates for per capita gross national income and gross domestic product vary by source. For example, India's average GDP per capita on PPP basis in 2009, according to The Economist, was US$5,138, with significant variation among its states and union territories. Goa had the highest per capita PPP GDP at US$14,903, while Bihar the lowest with per capita PPP GDP of US$682 as of 2015[12] In rupee terms, India's per capita income grew by 10.4% to reach Rs.74,920 in 2013–14.

While India's per capita incomes were low, the average household size and consequent household incomes were higher. India had a total of 247 million households in 2011, with an average of about 4.9 people per household, according to Census of India.[13]

Estimates for average household income and the size of India's middle-income households vary by source. Using World Bank's definition of middle-income families to be those with per capita income between $10 and $50 per day,[14] the National Council of Applied Economic Research[15] of India completed a survey and concluded there were 153 million people who belonged to middle income group in 2006. In contrast, Meyer and Birdsall and Tim Light used a different survey and estimated the number of Middle-Income population to be about 70 million in 2009–2010.[16] These groups, as well as the World Bank, estimated in their 2011 reports that if India's economy continues to grow per projections, India's middle income group would double by 2015 over 2010 levels, and grow by an additional 500 million people by 2025. This would make it, with China, the world's largest middle income market.[17]

Compared to other countries, income inequality in India is relatively small as measured by Gini coefficient. India had a Gini coefficient of 32.5 in the year 1999- 2000;[18] India's nominal Gini index rose to 36.8 in 2005, while real Gini after tax remained nearly flat at 32.6.[19]

The states of India have significant disparities in their average income.[20] Bihar was by far the poorest in India, and per capita income was low in its neighbouring states, along with Uttar Pradesh, Jharkhand, Jammu & Kashmir, Assam, Manipur, and Nagaland.[21] The higher income states include Goa, Delhi, Haryana, Sikkim, Telangana, Maharashtra, Tamil Nadu, Gujarat, Himachal Pradesh, Punjab, Uttarakhand, and Kerala.[22][23][24]

Rural-urban gap

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Gini coefficient of India and other countries according to the World Bank (2018).[25] Higher Gini Index means more income inequality.

As in other countries, residents of Indian cities have a higher per capita income and standard of living than rural residents. Towns and cities make more than two-thirds of the Indian GDP, even though less than a third of the population live in them.[26]

The Economic Survey of India 2007 by OECD concluded that:

"At the state level, economic performance is much better in states with a relatively liberal regulatory environment than in the relatively more restrictive states".[26]

The analysis of this report suggests that the differences in economic performance across states are associated with the extent to which states have introduced market-oriented reforms. Thus, further reforms on these lines, complemented with measures to improve infrastructure, education and basic services, would increase the potential for growth outside of agriculture and thus boost better-paid employment, which is a key to sharing the fruits of growth and lowering poverty.

Statistics

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Percentage share in total national household disposable income by Class (2016)[27]

  Quintile 5 (Top 20%) (44.9%)
  Quintile 4 (22.1%)
  Quintile 3 (15.2%)
  Quintile 2 (10.8%)
  Quintile 1 (Bottom 20%) (7%)

Distribution of Annual Household Income in India (in pounds/annum)[28]

  <£2,000 (50%)
  £2,000 to £4,500 (30%)
  £4,500 to £11,000 (14%)
  £11,000 to £23,000 (4%)
  >£24,000 (2%)
Taxpayers in India by Group[29]
Income Group No. of tax payers (in lakhs)
Up to ₹5 lac
445
₹5-10 lac
101
₹10-20 lac
32.11
₹20-50 lac
12.31
₹50 lac to ₹1 crore
2.25
Over ₹1 crore
1.08

Source: IT Department

See also

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References

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  1. ^ "PER CAPITA INCOME". pib.gov.in. Retrieved 7 April 2024.
  2. ^ "Per capita national income in India FY 2015-2020 Published by Statista Research Department, Oct 16, 2020".
  3. ^ "In the pandemic, India's middle class shrinks and poverty spreads while China sees smaller changes". Pew Research Center. Retrieved 18 March 2021. The poor live on $2 or less daily, low income on $2.01-$10, middle income on $10.01-$20, upper-middle income on $20.01-$50 and high income on more than $50. All dollar figures are expressed in 2011 prices and purchasing power parity dollars, currency exchange rates adjusted for differences in the prices of goods and services across countries.
  4. ^ "India's missing middle class". The Economist. 11 January 2018. Archived from the original on 10 August 2019. Retrieved 10 August 2019.
  5. ^ "Poverty and Inequality Platform". World Bank. Archived from the original on 30 January 2023. Retrieved 17 May 2022.
  6. ^ "GDP per capita of India". StatisticsTimes. Retrieved 27 December 2021.
  7. ^ "Press Note on Provisional Estimates of Annual GDP for 2023-24" (PDF). Ministry of Statistics & Programme Implementation, India. Retrieved 12 August 2023.
  8. ^ "Salaried workers' real wages dropped between 2012 and 2022: ILO study". Business Standard. Retrieved 11 May 2021.
  9. ^ a b "India Employment Report 2024: Youth Employment, Education and Skills" (PDF). International Labour Organization. Retrieved 11 May 2024.
  10. ^ "GNI per capita, Atlas method (current US$)". World Bank. 1 May 2014. Retrieved 16 July 2014.
  11. ^ "GNI per capita, PPP (current international $)". World Bank. 1 May 2014. Retrieved 16 July 2014.
  12. ^ "Per capita of Indian states". Archived from the original on 30 October 2017. Retrieved 16 January 2016.
  13. ^ Households data for India Archived 26 July 2014 at the Wayback Machine Census of India 2011, Govt of India (2013)
  14. ^ Kharas, H. (2010). The Emerging Middle Class In Developing Countries. Working Paper 285, OECD Development Center, Paris
  15. ^ National Survey of Household Income and Expenditure (NSHIE)/Market Information Survey of Households (MISH) NCAER India (2013)
  16. ^ Meyer and Birdsall, New Estimates of India's Middle Class Center for Global Development (2012)
  17. ^ Kharas, The Emerging Middle Class in Developing Countries Brookings Institution (World Bank Conference, 2011)
  18. ^ "Fact Sheet: Gini Coefficient" (PDF). Source: The World Bank (2004) and Census and Statistics Department (2002). Legislative Council Secretariat Hong Kong. Archived from the original (PDF) on 3 March 2016. Retrieved 1 August 2007. Note: The Gini coefficient in this datasheet is calculated on a scale of 0 to 1 and not 0 to 100. Hence, on a scale of 100 India's Gini coefficient (1999-2000) was 32.5 rather than 3.25
  19. ^ Gehring, Keith; Kulkarni, Kishore G (2008). "Economic growth and income inequality in India" (PDF). GITAM Journal of Management.
  20. ^ Datt, Ruddar; Sundharam, K.P.M. "27". Indian Economy. pp. 471–472.
  21. ^ Comparing Indian states and territories, CEIC, The Economist, (June 2011).
  22. ^ "Development Policy Review". World Bank.
  23. ^ Sachs, D. Jeffrey; Bajpai, Nirupam; Ramiah, Ananthi (2002). "Understanding Regional Economic Growth in India" (PDF). Working paper 88. Archived from the original (PDF) on 1 July 2007.
  24. ^ Kurian, N.J. "Regional disparities in india". Archived from the original on 1 October 2005. Retrieved 6 August 2005.
  25. ^ "GINI index (World Bank estimate) | Data". data.worldbank.org. Retrieved 23 July 2020.
  26. ^ a b "Economic survey of India 2007: Policy Brief" (PDF). OECD. Archived from the original (PDF) on 6 June 2011.
  27. ^ "India's Quintile 5 own 45% of the income". livemint.in. December 2016.
  28. ^ "India Demographics—Income". imrg.org. Archived from the original on 27 August 2021. Retrieved 27 August 2021.
  29. ^ "Times of India— Number of Taxpayers". timesofindia.com.
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